Bonds Mechanism
What are TBOND (Bonds)?
Bonds are unique tokens that can be utilized to help stabilize TANGERINE price around peg (1 BNB) by reducing circulating supply of TANGERINE if the TWAP (time-weighted-average-price) goes below peg (1 BNB).
When can I buy TBOND (Bonds)?
TBOND can be purchased only on contraction periods, when TWAP of TANGERINE is below 1.
Every new epoch on contraction periods, TBONDs are issued in the amount of 3% of current TANGERINE circulating supply, with a max debt amount of 35%. This means that if bonds reach 35% of circulating supply of TANGERINE, no more bonds will be issued.
Note: TBOND TWAP (time-weighted average price) is based on TANGERINE price TWAP from the previous epoch as it ends. This mean that TANGERINE TWAP is real-time and TBOND TWAP is not.
Where can I buy TBOND (Bonds)?
You can buy TBONDs if any are available, through the Bonds on aoh.app anyone can buy as many TBONDs as they want as long as they have enough TANGERINE to pay for them.
There is a limit amount (3% of TANGERINE current circulating supply) of available TBONDs per epoch while on contraction periods, and are sold as first come first serve.
Why should I buy TBOND (Bonds)?
First and most important reason is Bonds help maintain the peg, but will not be the only measure use to keep the protocol on track. In Agent Orange token. we have 2% buy fee that will be use to help maintain the TANGERINE back to peg together with the DAO fund.
TBONDs don't have a expiration date, so you can view them as a investment on the protocol, because longterm you get benefits from holding bonds.
Incentives for holding TBOND
The idea is to reward TBOND buyers for helping the protocol, while also protecting the protocol from being manipulated from big players.
So after you buy TBOND using TANGERINE, you get 2 possible ways to get your TANGERINE back:
Sell back your TBOND for TANGERINE while peg is between 1 - 1.1 (1 BNB) with no redemption bonus. This to prevent instant dump after peg is recovered
Sell back your TBOND for TANGERINE while peg is above 1.1 (1 BNB) with a bonus redemption rate
The longer you hold, the more both the protocol and you benefit from Tbonds.
Example:
When TANGERINE = 0.8, burn 1 TANGERINE to get 1 TBOND (TBOND price = 0.8)
When TANGERINE = 1.15, redeem 1 TBOND to get 1.105 TANGERINE (TBOND price = 1.27)
So, which one is better?
If I buy TANGERINE at 0.8, and hold it until 1.15 and then sell, I'm getting +0.35$ per TANGERINE
But, if I buy TANGERINE at 0.8, burn it for TBOND, and redeem it at 1.15, I'm getting 1.105 TANGERINE * 1.15 (TANGERINE current price) = 1,271 (+0.47$) per TBOND redeemed.
But what if getting back to peg is taking too long ?
We are going to adjust our use cases, to have different behaviors on contraction and expansion periods to benefit TANGERINE and TBOND holders when needed.
When can I swap TBOND for a bonus?
TBOND TWAP (time-weighted average price) is based on TANGERINE price TWAP from the previous epoch as it ends. This mean that TANGERINE TWAP is real-time and TBOND TWAP is not. In other words, you can redeem TBOND for a bonus when the previous epoch's TWAP > 1.1.
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